Let's Make An Oil Deal

Ray Hunt isn't your typical Texas tycoon. Unlike other billionaire oilmen who hype their legends in the press, Hunt tries hard to keep his name out of the newspapers. The son of wildcatter H. L. Hunt, who lived his life in the spotlight, Ray Hunt rarely gives interviews and refuses to provide even mundane details about the workings of his private oil and real-estate ventures. He's given big sums to his alma mater, Southern Methodist University, in Dallas, but he will not allow his name to be affixed to any of the buildings his money helped pay for. Hunt's discretion may be one reason he has developed a close relationship with the Bush family, who greatly value privacy.

Hunt's money could also have something to do with it. Over the years, the oilman raised hundreds of thousands of dollars to elect both George W. Bush and his father. The son rewarded Hunt with a seat on the President's Foreign Intelligence Advisory Board, a panel of outside elders who oversee whether the commander in chief is getting good advice from the intel community. More recently Hunt has been especially generous about helping to plan—and pay for—Bush's postpresidential ambitions. He lobbied the president to build the Bush 43 presidential library at SMU—which is where Laura Bush studied—and since then he's given $35 million to the school to buy some of the land where part of the library complex could sit.

Hunt's generosity may help explain why the White House has been seemingly reluctant to question another of the oilman's projects—this one in Iraq. To the apparent surprise, and irritation, of officials in Washington and in Baghdad, Hunt Oil announced this month that, after secret negotiations, it had struck a deal with leaders in the country's Kurdish-controlled north to explore for oil in the Dahuk region near the Turkish border. News of the deal angered Iraqi Arab leaders, who saw it as a Kurdish power play for the country's oil resources, one that appeared to disrupt already fragile talks over a critical benchmark for peace: an agreement among the Sunni, Shiites and Kurds to share profits from the country's bountiful oil supply. The hope is that a national revenue-sharing law will help defuse tensions—and curtail violence—by getting the three groups to work toward a vital common goal. But the negotiations have stalled, largely because of a lack of trust. The Iraqi Oil minister denounced the Hunt agreement as illegal—though without a law in place it's hard to argue the Kurds have violated it. The Kurds refused to disclose the terms of the deal but insisted they will share the profits.

In the United States, word of the agreement inflamed Bush detractors, who accused the president of helping a big-time contributor line his pockets at the expense of Iraqi peace. White House officials say they had no knowledge of Hunt's negotiations, and did not help him. Hunt declined to comment, but Jeanne Phillips, a spokeswoman for the company, says it told no one about the negotiations. "We do not discuss potential business deals with the United States government," she says. After the agreement was made public, Phillips says, government officials called to ask for details, but even then the company refused. Kurdish officials also say they kept the negotiations secret from the United States.

White House officials may not have helped Hunt put together the deal, but that doesn't mean they're not doing their best to portray Hunt's project as a sign of progress. "It's positive that a firm would choose to invest in Iraq—whether an American firm or not," says spokesman Tony Fratto. He downplayed the notion that the Hunt deal could undermine already tense negotiations to reach a national oil-sharing agreement. "As for how it impacts reform of the oil law in Iraq, authorities there will have to work that out." The optimistic subtext to the White House line: the Hunt agreement will prompt the three groups to begin negotiating a national oil law in earnest to avoid future secret side deals.

At least one top White House official was willing to express some skepticism. Asked by NEWSWEEK about the controversy at last Thursday's news conference, President Bush said, "I knew nothing about the deal. I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with an oil revenue-sharing plan that unifies the country, obviously if it undermines it, I'm concerned." There is one way the president can find out exactly how the deal happened. He can call his old friend Ray Hunt and ask him.